MARKET POWER OF INDONESIAN BANKING

Andi Fahmi Lubis ()
Additional contact information
Andi Fahmi Lubis: University of Indonesia

Bulletin of Monetary Economics and Banking, 2012, vol. 14, issue 3, 225-244

Abstract: This study aimed to estimate the degree of market power exercised by commercial banks in the credit market in Indonesia. The model used to answer this study»s objective was the Bresnahan-Lau oligopoly model that uses structural equations to estimate the degree of market power. This model uses a very different approach than Structure-Conduct-Performance (SCP) paradigm commonly used in market power studies. Without using actual cost data and accounting profit, the Bresnahan-Lau model was able to estimate directly the degree of market power from the structural equations. The main result of this study showed that the degree of market power exercised by commercial banks in the credit market is relatively low; in other words, the degree of competition in the credit market in Indonesia is quite high.

Keywords: market power; oligopoly; Bresnahan-Lau; structure; performance; conduct; SCP (search for similar items in EconPapers)
JEL-codes: G21 L13 (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1300&context=bmeb (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:14:y:2012:i:3e:p:225-244

DOI: 10.21098/bemp.v14i3.403

Access Statistics for this article

Bulletin of Monetary Economics and Banking is currently edited by Paresh Narayan

More articles in Bulletin of Monetary Economics and Banking from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().